Changes to Housing Costs for 18-21 year olds on Universal Credit

Introduction

As of April 1st 2017, the government has removed the housing cost element from Universal Credit payments for many 18-21 year olds. This is intended as a cost saving measure to prevent young people from leaving their parental home while they are on benefits. This has been portrayed in the media as a blanket removal of the housing cost element, which will understandably dissuade landlords from renting to young people. There are a wide range of exemptions however, and landlords should be aware that most 18-21 year olds will still be eligible for assistance with their housing costs. In fact, this is likely to only affect around 1% of all claimants.

What are the changes?

From April 1st 2017, if a single person or couple are claiming Universal Credit and aged between 18-21, there will be no housing costs element if they are in a digital service area and none of the exemptions apply.

Are these changes nationwide?

No, this only applies to claimants who live in or started their claim in a digital service area. If claimants circumstances change and they move from a couple to two single claims, and vice versa, they will be affected if their previous claim was administered under the digital service system.

Will this affect my tenants who currently receive Housing Benefit or Universal Credit housing costs?

No, provided the tenant was already in receipt of a claim on 31st March 2017, they will still be entitled to it.

Who is exempt from the changes?

There is an extensive list of claimants who are exempt from the changes:

  1. Tenants with responsibility for a child
  2. Care leaver before reaching the age of 18
  3. Those in receipt of Disability Living Allowance at the middle or highest rate or in receipt of the daily living component of a Personal Independence Payment.
  4. An offender subject to an active multi-agency risk management arrangements.
  5. Those in temporary accommodation, provided by either a local authority or a provider of social housing, where the local authority is preventing homelessness or fulfilling another local authority duty.
  6. Tenants with an expected hours of work of less than 35 hours a week or those for whom a work search requirement is not imposed.
  7. In situations where a renter has been threatened with or the victim of domestic abuse by a partner or family member.
  8. Where they are earning equal to or more than 16 hours at their national minimum wage rate (£5.60 for 18-20 year olds, £7.10 for 21 year olds).
  9. Where they cannot, or it would be inappropriate to, live with a parent in the UK.

Living with parents

The purpose of these changes to Universal Credit are to make it more likely that a young Universal Credit claimant will live in their parental home. However, the legislation recognises this is not appropriate in many circumstances. The DWP have provided an extensive, though not exhaustive, list of circumstances where it would be deemed inappropriate for the renter to live with their parents. This will have to be assessed on a case by case basis but, if the parents are deceased, living outside the UK, or there is serious risk of physical or mental harm should the claimant move in with their parents, then the claimant is highly likely to be successful in receiving the housing costs portion of Universal Credit.

Conclusion

Due to the limitation to new claims in digital service areas, as well as the list of exemptions available, this change is unlikely to affect too many landlords. As a result, 18-21 year olds should still remain as attractive as they ever were as tenants for private landlords.

Landlord & Investment Show
Martin Co
Envirovent
Landlord Broadband

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